15.06.2010 - The European Commission today concluded on the existence of excessive deficits in Cyprus, Denmark and Finland and recommended deadlines for their correction to the Council.
The EU budgetary surveillance framework implies, inter alia, that excessive deficits should be avoided. The excessive deficit procedure (EDP), as the "corrective arm" of the Pact, is regulated by Article 126 of the Treaty and further specified in Council Regulation 1467/97.
As a follow-up of the reports under Article 126(3) adopted by the European Commission on 12 May, the Commission today concluded on the existence of excessive deficits in Cyprus, Denmark and Finland under Article 126(5). Simultaneously, the Commission proposed to the Council to decide that an excessive deficit exists in these countries under Article 126(6) and recommended the Council under Article 126(7) to issue recommendations to correct the excessive deficits by a given deadline. In the case of Cyprus the Commission recommended to the Council to set a deadline of 2012 for correction, requiring an annual structural adjustment of 1¾% of GDP over the period 2010-2012. For Denmark, the Commission recommended the Council to set a deadline of 2013 for correction of the excessive deficit, requiring an annual structural adjustment of ½% of GDP over the period 2011-2013. Finally, the Commission recommended the Council to set a deadline of 2011 for Finland to correct its excessive deficit, requiring a structural adjustment of at least ½% of GDP in 2011.
The Ecofin Council is expected to decide on the recommendations at the upcoming meeting of 13 July. The Member States concerned will then have six months to indicate what action they have taken or plan to take to progressively reduce the budget deficit.
>> Press release IP/10/738 Commission
recommends to open excessive deficit procedures for Cyprus, Denmark and
>> Excessive deficit procedure. Cyprus
>> Excessive deficit procedure. Denmark
>> Excessive deficit procedure. Finland
>> Excessive deficit procedure. Index